DoD's $46M Redstone Arsenal lab construction contract awarded to Caddell Construction shows strong competition

Contract Overview

Contract Amount: $46,160,375 ($46.2M)

Contractor: Caddell Construction CO. (DE), LLC

Awarding Agency: Department of Defense

Start Date: 2012-01-20

End Date: 2016-07-28

Contract Duration: 1,651 days

Daily Burn Rate: $28.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TAS::15 0203::TAS CONSTRUCTION OF INTERIM LAB PHASE 1, REDSTONE ARSENAL, AL

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35801

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $46.2 million to CADDELL CONSTRUCTION CO. (DE), LLC for work described as: TAS::15 0203::TAS CONSTRUCTION OF INTERIM LAB PHASE 1, REDSTONE ARSENAL, AL Key points: 1. Contract value of $46.2 million for construction services. 2. Awarded under full and open competition, indicating a robust bidding process. 3. The contract duration of 1651 days suggests a significant, long-term project. 4. Fixed-price contract type helps mitigate cost overrun risks for the government. 5. The project is located at Redstone Arsenal, a key military installation. 6. Caddell Construction Co. (DE), LLC is the sole awardee. 7. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: good

The contract value of $46.2 million for the construction of an interim lab at Redstone Arsenal appears reasonable given the scope and duration. Benchmarking against similar large-scale construction projects for government facilities is necessary for a definitive value assessment. However, the firm fixed-price nature of the contract suggests that the contractor assumed a significant portion of the cost risk, which can be favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 7 bidders (no) indicates a healthy level of competition for this significant construction project. This competitive environment generally leads to better pricing and service offerings for the government.

Taxpayer Impact: The full and open competition for this contract likely resulted in a more competitive bid landscape, potentially leading to cost savings for taxpayers compared to a sole-source or limited competition award.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Army, which gains enhanced laboratory facilities at Redstone Arsenal. The project delivers essential infrastructure for research, development, or testing activities. The geographic impact is concentrated at Redstone Arsenal, Alabama, supporting military operations in the region. The construction activities would have implications for the local and regional construction workforce, creating jobs and economic activity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting operational readiness.
Ensuring adherence to strict military construction standards and security protocols.
Managing the environmental impact during the construction phase.

Positive Signals

Award to an experienced construction firm with a track record in government projects.
Firm fixed-price contract provides cost certainty.
Robust competition suggests a well-defined requirement and market interest.

Sector Analysis

This contract falls within the construction sector, specifically commercial and institutional building construction. The market for large-scale government construction projects is substantial, with numerous firms capable of undertaking such work. This project represents a significant investment in military infrastructure, aligning with broader government spending on defense facilities and modernization.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (sb: false). While Caddell Construction Co. is a large business, there may be subcontracting opportunities for small businesses within the scope of this project. Further analysis of subcontracting plans would be needed to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Army contracting command. The firm fixed-price nature provides some inherent oversight by limiting the government's exposure to cost increases. Transparency would be facilitated through contract award databases and potentially through agency reporting on project milestones.

Related Government Programs

Military Construction
Research and Development Facilities
Department of Defense Infrastructure Projects
Federal Building Construction

Risk Flags

Potential for cost overruns if scope changes significantly.
Risk of construction delays impacting project timelines.
Ensuring contractor compliance with all federal and military standards.
Managing environmental impact during construction.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.2 million to CADDELL CONSTRUCTION CO. (DE), LLC. TAS::15 0203::TAS CONSTRUCTION OF INTERIM LAB PHASE 1, REDSTONE ARSENAL, AL

Who is the contractor on this award?

The obligated recipient is CADDELL CONSTRUCTION CO. (DE), LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $46.2 million.

What is the period of performance?

Start: 2012-01-20. End: 2016-07-28.

What is Caddell Construction Co.'s track record with similar federal construction contracts?

Caddell Construction Co. (DE), LLC has a significant history of performing federal construction projects, particularly for the Department of Defense and the Army. Their portfolio often includes military barracks, training facilities, and other specialized infrastructure. A review of their past performance ratings and any past performance issues on similar projects would be crucial for a comprehensive assessment. Their experience with firm fixed-price contracts and projects of this magnitude suggests a capacity to manage complex construction endeavors. Further due diligence would involve examining their safety records, quality control processes, and any history of litigation or disputes on government contracts.

How does the awarded price compare to similar interim lab construction projects?

Directly comparing the $46.2 million award to similar interim lab construction projects requires access to a database of comparable federal contracts, including project scope, size, location, and completion dates. Factors such as specialized equipment, unique environmental controls, or advanced security features can significantly influence costs. Without specific comparable data, it's challenging to definitively benchmark the value. However, the firm fixed-price contract type and the competitive bidding process (7 bidders) suggest that the price was likely market-driven and represents a reasonable value proposition at the time of award. The duration of the contract (1651 days) also indicates a substantial undertaking.

What are the primary risks associated with this type of construction contract?

The primary risks associated with this firm fixed-price construction contract include potential cost overruns if the contractor miscalculates expenses, delays in project completion due to unforeseen site conditions or labor shortages, and quality control issues if not adequately managed. For a military installation like Redstone Arsenal, security risks and compliance with stringent military construction standards are also significant. Environmental risks during construction, such as soil contamination or waste disposal, must also be considered. The government's risk is generally lower with fixed-price contracts, but ensuring the contractor has adequate bonding and insurance is critical. The long duration also increases the risk of material price fluctuations or changes in regulatory requirements.

How effective is the firm fixed-price contract type in managing costs for this project?

The firm fixed-price (FFP) contract type is generally considered effective in managing costs for construction projects where the scope of work is well-defined and risks can be reasonably anticipated. Under an FFP contract, the contractor assumes the majority of the financial risk, agreeing to complete the work for a predetermined price. This incentivizes the contractor to control costs and improve efficiency. For the government, it provides cost certainty, making budgeting more predictable. However, if unforeseen issues arise that significantly alter the scope or complexity, the government might face challenges if change orders are extensive. The success of FFP in this case depends on the thoroughness of the initial project scope definition and the contractor's ability to manage their own costs effectively.

What is the historical spending pattern for construction at Redstone Arsenal?

Analyzing historical spending patterns for construction at Redstone Arsenal would require access to detailed federal procurement data over several fiscal years. This would involve identifying all construction contracts awarded to the installation, their values, types, and durations. Such an analysis could reveal trends in investment in infrastructure, types of facilities being prioritized (e.g., labs, housing, training), and the typical competition levels for these projects. Understanding historical spending can help contextualize the $46.2 million award, indicating whether it represents a typical investment or a significant deviation. It could also highlight any recurring issues or successful strategies employed in past construction efforts at the arsenal.

What are the implications of the 7 bidders for price discovery and taxpayer value?

The fact that 7 bidders competed for this contract is a strong positive signal for price discovery and taxpayer value. A larger number of bidders generally indicates a competitive market where multiple firms are interested and capable of performing the work. This heightened competition typically drives down prices as contractors strive to offer the most attractive bid to win the contract. For taxpayers, this means a higher likelihood that the awarded price reflects fair market value and that the government is not overpaying for the construction services. It also suggests that the government's requirements were clearly articulated, attracting a broad range of potential offerors.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9127811R0029

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Caddell Construction CO., Inc. (UEI: 102087285)

Address: 2700 LAGOON PARK DR, MONTGOMERY, AL, 36109

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $46,160,375

Exercised Options: $46,160,375

Current Obligation: $46,160,375

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9127811D0066

IDV Type: IDC

Timeline